Domestic And International Environment Improved, Textile And Clothing Warmer

　　内销增速延续，预期增长20%。2009年零售数据尤其是上市公司的数据前低后高，全年增速15.50%，前四个月同比增长了18.10%。

We believe that with the rise of inflation and the rise of CPI indicators, the domestic consumer market still performs well. Although the base point in the second half of 2009 is relatively high, we still expect that the total retail sales of consumer goods will grow by 20% in 2010.

Export recovery, the external situation is complex.

China's main trading partner, the European Union, is suffering from the post crisis era. The euro has fallen sharply, and the US market has also stepped up its concerns about raising interest rates. This may cause concern for exports in the second half of 2010.

In the first 4 months of 2010, the export growth rate of textile and clothing was 15.55%, the trend of recovery was obvious; the turnover of the first index spring fair increased by 12.57%, the textile and clothing grew by 9.14%, and the growth rate dropped slightly, reflecting the worries of the enterprises on the peripheral situation.

We have raised the growth rate of textile and garment exports to around 10%.

Textile clothing is getting warmer.

In 2009, the income of textile and garment industry increased by 10.29% compared with the same period last year, operating profit increased by 110.65% compared to the same period last year, net profit increased by 80.40% compared to the same period last year, and the average realized 0.27 yuan EPS, reversing the downward trend in 2008.

The income and net profit growth of the two sub sectors of textiles and clothing are all showing signs of improvement. The textile sub industry continues to outstrip the clothing sub sectors, while the garment industry has maintained a steady growth trend.

Earnings indicators also continued to rebound in the second half of the year.

The gross profit margin, main business profit margin and net profit rate of textile and garment industry were 21.88%, 8.77% and 7.84% respectively, among which gross margin and main business profit margin hit a new high in recent years.

Driven by cost, the profit growth rate of textile sub sectors increased by 101.12% in the 1 quarter, far exceeding the growth rate of garment sub sectors.

Highlight and dig out stocks.

The performance of the past textile and garment industry has been clearly divided into two parts. The brand clothing has been deeply excavated to be a white horse type. These companies have good prospects, expect stable growth, and enjoy the beneficial sector under inflation expectation. Textile companies have contributed to various kinds of dark horse due to asset injection or diversification. We continue to appreciate the expected benefits of stocks such as Changshan shares.

We maintain the "overweight" rating of garment sub sectors and maintain the "neutral" rating of textile sub industries. We believe that the textile enterprises that are fully competitive under cost push and oversupply of products are difficult to sustain profits, and the strategy of digging up stocks is mainly.